The government today said the total tax collections-both direct and indirect-for 2010-11 have exceeded even the revised estimate on the back of strong economic activities.
“I am reasonably sure that we will cross Rs 4.50 lakh crore in direct taxes...I am reasonably confident that it (indirect tax) will be around Rs 3.43 lakh crore-Rs 3.44 lakh crore,” Revenue Secretary Sunil Mitra told reporters on the sidelines of an IPPAI conference.
The government had estimated a direct tax collection of Rs 4,30,000 crore in the 2010-11 budget, which was later revised upwards to Rs 4,46,000 crore.
Despite the income tax department paying Rs 72,000 crore as refunds, the robust direct tax collection is the highest in any financial year.
According to Mr. Mitra, the Finance Ministry has already mopped up Rs 3.40 lakh crore as indirect tax in 2010-11, against the revised estimate of Rs 3.34 lakh crore.
The upward revision of the tax collection target was due to robust economic growth in the last fiscal. The country’s GDP is expected to grow 8.6 per cent in 2010-11.
The buoyancy in indirect tax collections during the last fiscal can also be attributed to partial withdrawal of economic stimulus measures in the Budget 2010-11.
In the Budget 2010-11, Finance Minister Pranab Mukherjee raised excise duty by 2 per cent to 10 per cent as part of a plan to gradually withdraw the incentives given to the industry to combat the impact of the global financial meltdown.